IREN Surges 5.95% Amid $2.3B Capital Raise and AI Cloud Expansion – What’s Fueling the Momentum?

Summary
• IREN’s stock price jumps 5.95% to $37.93, surging from a $36.69 intraday low to a $38.28 high
• $2.3B capital raise and $9.7B AI cloud contract with Microsoft drive investor optimism
• Goldman Sachs initiates coverage with a 'Neutral' rating and $39 price target

IREN’s dramatic intraday rally reflects a confluence of strategic capital deployment, AI cloud expansion, and sector-specific momentum. The stock’s 5.95% surge to $37.93 underscores investor confidence in its pivot from Bitcoin mining to AI infrastructure, fueled by a $2.3B capital raise and a landmark Microsoft deal. With the data center sector in flux, IREN’s aggressive expansion and renewable energy focus position it as a key player in the AI-driven infrastructure race.

IREN's $2.3B Capital Raise and AI Cloud Expansion Drive Sharp Price Surge
IREN’s 5.95% intraday surge to $37.93 is directly tied to its $2.3B capital raise and a $9.7B AI cloud contract with Microsoft. The funding, structured as convertible notes and equity, enables rapid GPU deployment and data center expansion in Texas and Canada. This move aligns with IREN’s strategic pivot from Bitcoin mining to AI cloud services, leveraging its renewable energy infrastructure to secure low-cost power for high-performance computing. Goldman Sachs’ initiation of coverage with a $39 price target further validates the company’s growth trajectory, despite concerns over valuation and execution risks.

Data Center Sector Mixed as IREN Outpaces Peer Equinix (EQIX)
While IREN’s stock surged 5.95%, sector peer Equinix (EQIX) rose only 0.469%, highlighting divergent investor sentiment. IREN’s aggressive capital allocation and AI cloud focus contrast with Equinix’s more conservative, REIT-like model. The data center sector remains fragmented, with investors favoring companies demonstrating clear AI infrastructure scalability and renewable energy advantages. IREN’s ability to secure 2.5+ GW of grid-connected power and execute its Microsoft contract will be critical to maintaining this momentum.

IREN20251226C38 and IREN20251226C39.5: High-Leverage Plays on AI Cloud Expansion
• 200-day average: $25.8175 (well below current price)
• RSI: 32.64 (oversold territory)
• MACD: -4.309 (bearish divergence)
• Bollinger Bands: $33.85 (lower) to $52.70 (upper)

IREN’s technicals suggest a short-term rebound from oversold levels, with the 200-day average acting as a critical support. The stock’s 5.95% rally has pushed it toward the upper Bollinger Band, indicating potential for further volatility. For leveraged exposure, Defiance Daily Target 2X Long IREN ETF (IRE) and Leverage Shares 2X Long IREN Daily ETF (IREG) offer amplified upside, though their 11.9% and 10.46% gains today highlight the sector’s volatility.

Top Option 1: IREN20251226C38 (Call)
• Strike: $38 | Expiration: 2025-12-26 | IV: 83.99% | Leverage Ratio: 20.00% | Delta: 0.5277 | Theta: -0.2110 | Gamma: 0.0842 | Turnover: 212,836
• IV (Implied Volatility): High volatility suggests strong market expectations
• Leverage Ratio: Amplifies gains if the stock breaks above $38
• Delta: Moderate sensitivity to price changes
• Theta: Rapid time decay favors quick directional moves
• Gamma: High sensitivity to price acceleration
• Turnover: High liquidity ensures easy entry/exit
• Payoff at 5% Upside: $39.83 → $1.83 gain per contract
• This call option is ideal for capitalizing on a breakout above $38, leveraging high gamma and IV to maximize returns in a short timeframe.

Top Option 2: IREN20251226C39.5 (Call)
• Strike: $39.5 | Expiration: 2025-12-26 | IV: 79.12% | Leverage Ratio: 32.48% | Delta: 0.3958 | Theta: -0.1786 | Gamma: 0.0866 | Turnover: 16,347
• IV: Slightly lower but still robust
• Leverage Ratio: Highest among selected options for aggressive upside
• Delta: Lower sensitivity, but gamma compensates for price acceleration
• Theta: Moderate time decay suitable for 1–2-day holding periods
• Turnover: Sufficient liquidity for active trading
• Payoff at 5% Upside: $39.83 → $0.33 gain per contract
• This option offers a high-leverage play on a sustained move above $39.50, with gamma amplifying gains if the stock accelerates higher.

Trading Hook: Aggressive bulls should target IREN20251226C38 into a break above $38.28 (intraday high). If the stock consolidates near $38, IREN20251226C39.5 offers a higher-risk, higher-reward setup for a push toward $40.

Backtest IREN Stock Performance
The backtest of Invesco QQQ Trust (IREN) following a 6% intraday increase from 2022 to the present shows impressive results. The strategy achieved a 243.04% return, significantly outperforming the benchmark return of 45.28%. With an excess return of 197.76% and a CAGR of 37.16%, the strategy demonstrated robust growth potential. However, it's important to note that the strategy had a maximum drawdown of 0.00%, indicating a lack of risk management during market downturns.

IREN’s AI Cloud Bet Positions It for Volatility – Watch $38.30 Intraday High for Next Move
IREN’s 5.95% rally reflects a pivotal inflection point in its transition from Bitcoin mining to AI cloud infrastructure. The $2.3B capital raise and Microsoft contract provide a clear runway for growth, but execution risks—such as GPU deployment delays or Bitcoin price volatility—remain. Technically, the stock must hold above $38.30 (intraday high) to confirm bullish momentum. Sector leader Equinix (EQIX), up 0.469%, highlights the sector’s mixed performance, but IREN’s renewable energy edge and AI focus make it a standout. Act now: Buy IREN20251226C38 if $38.30 breaks, or short-term traders can scalp the $38–$39.50 range with IREN20251226C39.5 for a 5% upside target.